Developing Leaders Portfolio

Transcription

1 Dreyfus Variable Investment Fund Developing Leaders Portfolio Seeks capital growth by investing in stocks of small-cap companies PROSPECTUS May 1, 2008 As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

2 Dreyfus Variable Investment Fund Developing Leaders Portfolio The Portfolio Contents The Portfolio Goal/Approach 1 Main Risks 2 Past Performance 4 Expenses 5 Management 6 Financial Highlights 8 Account Information Account Policies 10 Distributions and Taxes 13 Exchange Privilege 13 For More Information See back cover. Portfolio shares are offered only to separate accounts established by insurance companies to fund variable annuity contracts (VA contracts) and variable life insurance policies (VLI policies). Individuals may not purchase shares directly from, or place sell orders directly with, the portfolio.the VA contracts and VLI policies are described in the separate prospectuses issued by the participating insurance companies, over which the portfolio assumes no responsibility. Conflicts may arise between the interests of VA contract holders and VLI policyholders (collectively, policyowners). The board of trustees will monitor events to identify any material conflicts and, if such conflicts arise, determine what action, if any, should be taken. The portfolio currently offers two classes of shares: Initial shares and Service shares. Policyowners should consult the applicable prospectus of the separate account of the participating insurance company to determine which class of portfolio shares may be purchased by the separate account. While the portfolio s investment objective and policies may be similar to those of other funds managed by the investment adviser, the portfolio s investment results may be higher or lower than, and may not be comparable to, those of the other funds.

3 GOAL/APPROACH The portfolio seeks capital growth. To pursue this goal, the portfolio normally invests at least 80% of its assets in the stocks of companies Dreyfus believes to be developing leaders: companies characterized by new or innovative products, services or processes having the potential to enhance earnings or revenue growth. Based on current market conditions, the portfolio primarily invests in small companies with market capitalizations of less than $2 billion at the time of purchase. Because the portfolio may continue to hold a security whose market capitalization grows, a substantial portion of the portfolio s holdings can have market capitalizations in excess of $2 billion at any given time.the portfolio s investments may include common stocks, preferred stocks and convertible securities, including those purchased in initial public offerings. The portfolio managers will select stocks through a bottom-up approach that seeks to identify undervalued securities using a quantitative screening process. This process is driven by a proprietary quantitative model which measures more than 40 stock characteristics to identify and rank stocks based on: fundamental momentum, measures that reflect the changes in short-term earnings outlook through factors such as revised earnings estimates and earnings surprises relative value, such as current and forecasted price-to-earnings ratios, price-to-book ratios, yields and other price-sensitive data for a stock compared to its past, its peers and the models overall stock universe future value, such as discounted present value measures long-term growth, measures that reflect the changes in estimated long-term earnings growth over multiple horizons additional factors, such as technical factors, trading by company insiders or share issuance/buyback data Next, through a bottom-up approach, the portfolio managers will focus on stock selection as opposed to making proactive decisions about industry or sector exposure. The portfolio managers will attempt to construct a portfolio that has exposure to industries and market capitalizations that is generally similar to the portfolio s benchmark. Finally, within each sector, the portfolio managers will seek to overweight the most attractive stocks and underweight or not hold the stocks that have been ranked least attractive. The portfolio may engage in short-selling, typically for hedging purposes, such as to limit exposure to a possible market decline in the value of its portfolio securities. Concepts to understand Small companies: new, often entrepreneurial companies. Small companies can, if successful, grow faster than large-cap companies and typically use profits for expansion rather than for paying dividends. Their share prices are more volatile than those of larger companies. Small companies fail more often. Growth companies: companies whose revenues and/or earnings are expected to grow faster than the overall market. Often, growth stocks pay little or no dividends, have relatively high price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more volatile than value stocks. Value companies: companies that appear underpriced according to certain financial measurements of their intrinsic worth or business prospects (such as price-to-earnings or price-to-book ratios). Because a stock can remain undervalued for years, value investors often look for factors that could trigger a rise in price. The Portfolio 1

4 MAIN RISKS The portfolio s principal risks are discussed below. The value of a shareholder s investment in the portfolio will fluctuate, sometimes dramatically, which means shareholders could lose money. Market risk. The market value of a security may decline due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. A security s market value also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Issuer risk. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer s products or services. Small company risk. Small companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies.the shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the portfolio s ability to sell these securities. These companies may have limited product lines, markets or financial resources, or may depend on a limited management group. Some of the portfolio s investments will rise and fall based on investor perception rather than economic factors. Other investments, including special situations, are made in anticipation of future products and services or events whose delay or cancellation could cause the stock price to drop. Growth and value stock risk. By investing in a mix of growth and value companies, the portfolio assumes the risks of both. Investors often expect growth companies to increase their earnings at a certain rate. If these expectations are not met, investors can punish the stocks inordinately, even if earnings do increase. In addition, growth companies typically lack the dividend yield that may cushion stock prices in market downturns.value companies involve the risk that they may never reach what the portfolio manager believes is their full market value, either because the market fails to recognize the stock s intrinsic worth or the portfolio manager misgauged that worth. They also may decline in price, even though in theory they are already undervalued. Short sale risk. The portfolio may make short sales, which involves selling a security it does not own in anticipation that the security s price will decline. Short sales expose the portfolio to the risk that it will be required to buy the security sold short (also known as covering the short position) at a time when the security has appreciated in value, thus resulting in a loss to the portfolio. IPO risk. The portfolio may purchase securities of companies in initial purchase offerings (IPOs) or shortly thereafter. The prices of securities purchased in IPOs can be very volatile.the effect of IPOs on the portfolio s performance depends on a variety of factors, including the number of IPOs the portfolio invests in relative to the size of the portfolio and whether and to what extent a security purchased in an IPO appreciates or depreciates in value. As a portfolio s asset base increases, IPOs often have a diminished effect on such portfolio s performance. 2

5 What the portfolio is and isn t Other potential risks The portfolio is a mutual fund: a pooled investment that is professionally managed and gives you the opportunity to participate in financial markets. It strives to reach its stated goal, although as with all mutual funds, it cannot offer guaranteed results. An investment in the portfolio is not a bank deposit. It is not insured or guaranteed by the FDIC or any other government agency. It is not a complete investment program. Shareholders could lose money in the portfolio, but shareholders also have the potential to make money. Under adverse market conditions, the portfolio could invest some or all of its assets in U.S. Treasury securities and money market securities. Although the portfolio would do this for temporary defensive purposes, it could reduce the benefit from any upswing in the market. During such periods, the portfolio may not achieve its investment objective. The portfolio may lend its portfolio securities to brokers, dealers and other financial institutions. In connection with such loans, the portfolio will receive collateral from the borrower equal to at least 100% of the value of the loaned securities. If the borrower of the securities fails financially, there could be delays in recovering the loaned securities or exercising rights to the collateral. At times, the portfolio may engage in short-term trading, which could produce higher transaction costs. The Portfolio 3

6 PAST PERFORMANCE The bar chart and table shown illustrate the risks of investing in the portfolio. The bar chart shows the performance of the portfolio s Initial shares from year to year.the table compares the average annual total returns of each of the portfolio s share classes to those of the Russell 2000 Index, a widely recognized, unmanaged index of smaller-capitalization common stocks. Performance for the portfolio s Service shares, which commenced operations on December 31, 2000, is based on the performance of the portfolio s Initial shares prior to that date. The historical performance of the portfolio s Service shares prior to December 31, 2000 has not been adjusted to reflect the higher operating expenses of the Service shares; if these expenses had been reflected, such performance would have been lower. All returns assume reinvestment of dividends and distributions. Of course, past performance is no guarantee of future results. Performance for each share class will vary due to differences in expenses. Additional costs Performance information reflects the portfolio s expenses only and does not reflect the fees and charges imposed by participating insurance companies under their VA contracts or VLI policies. Because these fees and charges will reduce total return, policyowners should consider them when evaluating and comparing the portfolio s performance. Policyowners should consult the prospectus for their contract or policy for more information. Year-by-year total returns as of 12/31 each year (%) Initial shares Best Quarter: Q % Worst Quarter: Q % Average annual total returns as of 12/31/07 1 Year 5 Years 10 Years Initial shares % 7.44% 3.89% Service shares % 7.18% 3.70% Russell 2000 Index -1.57% 16.25% 7.08% 4

7 EXPENSES Investors using this portfolio to fund a VA contract or VLI policy will pay certain fees and expenses in connection with the portfolio, which are described in the table below. Annual portfolio operating expenses are paid out of portfolio assets, so their effect is included in the portfolio s share price. As with the performance information given previously, these figures do not reflect any fees or charges imposed by participating insurance companies under their VA contracts or VLI policies. Fee table Initial shares Service shares Annual portfolio operating expenses % of average daily net assets Management fees 0.75% 0.75% Rule 12b-1 fee none 0.25% Other expenses 0.06% 0.06% Total 0.81% 1.06% Concepts to understand Management fee: the fee paid to Dreyfus for managing the portfolio and assisting in all aspects of the portfolio s operations. Rule 12b-1 fee: the fee paid to the portfolio s distributor for distributing Service shares, for advertising and marketing related to Service shares, and for providing account service and maintenance for holders of Service shares. The distributor may pay all or part of this fee to participating insurance companies and the broker-dealer acting as principal underwriter for their variable insurance products. Because this fee is paid on an ongoing basis out of portfolio assets attributable to Service shares, over time it will increase the cost of an investment in Service shares and could cost investors more than paying other types of sales charges. Other expenses: fees paid by the portfolio for miscellaneous items such as transfer agency, custody, professional and registration fees. The portfolio also makes payments to certain financial intermediaries, including affiliates, who provide sub-administration, recordkeeping and/or sub-transfer agency services to beneficial owners of the portfolio. Expense example 1 Year 3 Years 5 Years 10 Years Initial shares $83 $259 $450 $1,002 Service shares $108 $337 $585 $1,294 This example shows what an investor could pay in expenses over time. It uses the same hypothetical conditions other funds use in their prospectuses: $10,000 initial investment, 5% total return each year and no changes in expenses. This example does not reflect fees and expenses incurred under VA contracts and VLI policies; if they were reflected, the figures in the example would be higher. The figures shown would be the same whether investors sold their shares at the end of a period or kept them. Because actual returns and expenses will be different, the example is for comparison only. The Portfolio 5

8 MANAGEMENT Investment adviser The investment adviser for the portfolio is The Dreyfus Corporation (Dreyfus), 200 Park Avenue, New York, New York Founded in 1947, Dreyfus manages approximately $276 billion in approximately 180 mutual fund portfolios. For the past fiscal year, the portfolio paid Dreyfus a management fee at the annual rate of 0.75% of the portfolio s average daily net assets. A discussion regarding the basis for the board s approving the portfolio s investment advisory agreement with Dreyfus is available in the portfolio s semiannual report for the six months ended June 30, Dreyfus is the primary mutual fund business of The Bank of New York Mellon Corporation (BNY Mellon), a global financial services company focused on helping clients move and manage their financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing asset and wealth management, asset servicing, issuer services, and treasury services through a worldwide client-focused team. BNY Mellon has more than $23 trillion in assets under custody and administration and $1.1 trillion in assets under management, and its services more than $11 trillion in outstanding debt. Additional information is available at The Dreyfus asset management philosophy is based on the belief that discipline and consistency are important to investment success. For each fund, Dreyfus seeks to establish clear guidelines for portfolio management and to be systematic in making decisions.this approach is designed to provide each fund with a distinct, stable identity. Investment decisions for the portfolio are made by a committee of portfolio managers that comprise the smallcap team of Franklin Portfolio Associates, an affiliate of Dreyfus.The committee members are John S. Cone, Oliver Buckley, Langton C. Garvin and Kristin Crawford, each of whom also is an employee of Dreyfus and manage the portfolio in that capacity. The committee has been primarily responsible for the day-to-day management of the portfolio s investments since June There are no limitations on the role of a committee member with respect to making investment decision for the portfolio. Mr. Cone is chief executive officer and president of Franklin Portfolio Associates, where he has been employed since its inception in 1982, and has been a portfolio manager there since Mr. Buckley is chief investment officer and executive vice president of Franklin Portfolio Associates, which he joined in 2000, and has been a portfolio manager there since Mr. Garvin is a senior vice president of Franklin Portfolio Associates, which he joined in 2004, and has been a portfolio manager there since 2004; prior thereto, he was a portfolio manager with Batterymarch Financial Management from 2001 to Ms. Crawford is a vice president of Franklin Portfolio Associates, which she joined in 2000, where she was a research analyst from 2000 to 2003 and has been a portfolio manager since Franklin Portfolio Associates is an independently managed, wholly owned subsidiary of BNY Mellon. Franklin Portfolio Associates has no affiliation to the Franklin Templeton Group of Funds or Franklin Resources, Inc. The portfolio s Statement of Additional Information provides additional information about the portfolio managers compensation, other accounts managed by the portfolio managers, and the portfolio managers ownership of portfolio shares. 6

9 Distributor The portfolio s distributor is MBSC Securities Corporation (MBSC), a wholly-owned subsidiary of Dreyfus. Dreyfus or MBSC may provide cash payments out of its own resources to financial intermediaries that sell shares of the portfolio or provide other services. Such payments are separate from any 12b-1 fees or other expenses paid by the portfolio to those intermediaries. Because those payments are not made by you or the portfolio, the portfolio s total expense ratio will not be affected by any such payments.these additional payments may be made to intermediaries, including affiliates and participating insurance companies, that provide shareholder servicing, sub-administration, recordkeeping and/or sub-transfer agency services, marketing support and/or access to sales meetings, sales representatives and management representatives of the financial intermediary. Cash compensation also may be paid from Dreyfus or MBSC s own resources to intermediaries for inclusion of the portfolio on a sales list, including a preferred or select sales list or in other sales programs. These payments sometimes are referred to as revenue sharing. From time to time,dreyfus or MBSC also may provide cash or non-cash compensation to financial intermediaries or their representatives in the form of occasional gifts; occasional meals, tickets or other entertainment; support for due diligence trips; educational conference sponsorship; support for recognition programs; and other forms of cash or non-cash compensation permissible under broker-dealer regulations. In some cases, these payments or compensation may create an incentive for a financial intermediary or its employees to recommend or sell shares of the portfolio to you. Please contact your financial representative for details about any payments they or their firm may receive in connection with the sale of portfolio shares or the provision of services to the portfolio. Code of ethics The portfolio, Dreyfus and MBSC have each adopted a code of ethics that permits its personnel, subject to such code, to invest in securities, including securities that may be purchased or held by the portfolio. The Dreyfus code of ethics restricts the personal securities transactions of its employees, and requires portfolio managers and other investment personnel to comply with the code s preclearance and disclosure procedures. The primary purpose of the code is to ensure that personal trading by Dreyfus employees does not disadvantage any Dreyfus-managed fund. The Portfolio 7

10 FINANCIAL HIGHLIGHTS The following tables describe the performance of each share class for the fiscal periods indicated. Certain information reflects financial results for a single portfolio share. Total return shows how much your investment in the portfolio would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the portfolio s financial statements, is included in the annual report, which is available upon request. Keep in mind that fees and charges imposed by participating insurance companies, which are not reflected in the tables, would reduce the investment returns that are shown. Year Ended December 31, Initial shares Per-Share Data ($): Net asset value, beginning of period Investment operations: Investment income net Net realized and unrealized gain (loss) on investments (4.29) Total from investment operations (4.05) Distributions: Dividends from investment income net (.31) (.18) (.08) (.01) Dividends from net realized gain on investments (5.33) (3.62) Total distributions (5.64) (3.80) (.08) (.01) Net asset value, end of period Total Return (%) (11.06) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets Ratio of net investment income to average net assets Portfolio turnover rate Net assets, end of period ($ x 1,000) 447, , , , ,866 1 Based on average shares outstanding at each month end. 8

11 Year Ended December 31, Service shares Per-Share Data ($): Net asset value, beginning of period Investment operations: Investment income (loss) net (.02) (.07) Net realized and unrealized gain (loss) on investments (4.25) Total from investment operations (4.10) Distributions: Dividends from investment income net (.19) (.07) Dividends from net realized gain on investments (5.33) (3.62) Total distributions (5.52) (3.69) Net asset value, end of period Total Return (%) (11.28) Ratios/Supplemental Data (%): Ratio of total expenses to average net assets Ratio of net investment income (loss) to average net assets (.04) (.22) Portfolio turnover rate Net assets, end of period ($ x 1,000) 18,299 21,667 22,759 22,061 17,523 1 Based on average shares outstanding at each month end. The Portfolio 9

12 ACCOUNT POLICIES Buying/Selling shares Account Information Portfolio shares may be purchased or sold (redeemed) by separate accounts of participating insurance companies. Policyowners should consult the prospectus of the separate account of the participating insurance company for more information about buying or selling portfolio shares. The price for portfolio shares is the net asset value per share (NAV) of the relevant class, which is generally calculated as of the close of trading on the New York Stock Exchange (NYSE) (usually 4:00 p.m. Eastern time) on days the NYSE is open for regular business. Purchase and sale orders from separate accounts received in proper form by the participating insurance company on a given business day are priced at the NAV calculated on such day, provided that the orders are received by the portfolio in proper form on the next business day. The participating insurance company is responsible for properly transmitting purchase and sale orders. Wire purchase payments may be made if the bank account of the participating insurance company is in a bank that is a member of the Federal Reserve System or any other bank having a correspondent bank in New York City. Immediately available funds may be transmitted by wire to The Bank of New York (DDA# /Dreyfus Variable Investment Fund: Developing Leaders Portfolio/share class), for purchase of portfolio shares.the wire must include the portfolio account number (for new accounts, a taxpayer identification number should be included instead), account registration and dealer number, if applicable, of the participating insurance company. The portfolio s investments are valued on the basis of market quotations or official closing prices. If market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value (such as when the value of a security has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the portfolio calculates its NAV), the portfolio may value those investments at fair value as determined in accordance with procedures approved by the portfolio s board. Fair value of investments may be determined by the portfolio s board, its pricing committee or its valuation committee in good faith using such information as it deems appropriate under the circumstances. Fair value of foreign equity securities may be determined with the assistance of a pricing service using correlations between the movement of prices of foreign securities and indexes of domestic securities and other appropriate indicators, such as closing market prices of relevant ADRs and futures contracts. Using fair value to price securities may result in a value that is different from a security s most recent closing price and from the prices used by other mutual funds to calculate their net asset values. Foreign securities held by the portfolio may trade on days when the portfolio does not calculate its NAV and thus may affect the portfolio s NAV on days when investors have no access to the portfolio. 10

13 Investments in foreign and small-capitalization equity securities and certain other thinly traded securities may provide short-term traders arbitrage opportunities with respect to the portfolio s shares. For example, arbitrage opportunities may exist when trading in a portfolio security or securities is halted and does not resume, or the market on which such securities are traded closes before the portfolio calculates its NAV. If short-term investors in the portfolio were able to take advantage of these arbitrage opportunities, they could dilute the NAV of portfolio shares held by long-term investors. Portfolio valuation policies can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that such valuation policies will prevent dilution of the portfolio s NAV by short-term traders.while the portfolio has a policy regarding frequent trading, it too may not be completely effective to prevent short-term NAV arbitrage trading, particularly in regard to omnibus accounts. Please see below for further information about the portfolio s frequent trading policy. The portfolio is designed for long-term investors. Frequent purchases, redemptions and exchanges may disrupt portfolio management strategies and harm portfolio performance by diluting the value of portfolio shares and increasing brokerage and administrative costs. As a result, Dreyfus and the portfolio s board have adopted a policy of discouraging excessive trading, short-term market timing and other abusive trading practices (frequent trading) that could adversely affect the portfolio or its operations. Dreyfus and the portfolio will not enter into arrangements with any person or group to permit frequent trading. The portfolio reserves the right to: change or discontinue its exchange privilege, or temporarily suspend the privilege during unusual market conditions change its minimum or maximum investment amounts delay sending out redemption proceeds for up to seven days (generally applies only during unusual market conditions or in cases of very large redemptions or excessive trading) redeem in kind, or make payments in securities rather than cash, if the amount redeemed is large enough to affect portfolio operations (for example, if it exceeds 1% of the portfolio s assets) refuse any purchase or exchange request, including those from any participating insurance company, individual or group who, in Dreyfus view, is likely to engage in frequent trading Transactions in portfolio shares are processed by the participating insurance companies using omnibus accounts that aggregate the trades of multiple policyowners. Dreyfus ability to monitor the trading activity of these policyowners is limited because their individual transactions in portfolio shares are not disclosed to the portfolio. Accordingly, Dreyfus relies to a significant degree on the participating insurance company to detect and deter frequent trading.the agreement with the participating insurance company includes obligations to comply with all applicable federal and state laws. All participating insurance companies have been sent written reminders of their obligations under the agreements, specifically highlighting rules relating to trading portfolio shares. Further, all participating insurance companies have been requested in writing to notify Dreyfus immediately if, for any reason, they cannot meet their commitment to make portfolio shares available in accordance with the terms of the prospectus and relevant rules and regulations. Account Information 11

14 ACCOUNT POLICIES (continued) Dreyfus supplements the surveillance processes in place at participating insurance companies by monitoring total purchases and redemptions of portfolio shares on a periodic basis. If Dreyfus identifies patterns that may be indicative of frequent trading of large amounts, Dreyfus contacts the participating insurance company for assistance in disaggregating selected omnibus trades into their component parts. When this process identifies multiple roundtrips (i.e., an investment that is substantially liquidated within 60 days), Dreyfus instructs the participating insurance company to temporarily or permanently bar such policyowner s future purchases of portfolio shares if Dreyfus concludes the policyowner is likely to engage in frequent trading. Dreyfus also may instruct the participating insurance company to apply these restrictions across all accounts under common ownership, control or perceived affiliation. In all instances, Dreyfus seeks to make these determinations to the best of its abilities in a manner that it believes is consistent with shareholder interests. In addition to applying restrictions on future purchases or exchanges, Dreyfus or the participating insurance company may cancel or reverse the purchase or exchange on the business day following the transaction if the participating insurance company s surveillance system identifies the account as one that is likely to engage in frequent trading. Dreyfus may also instruct the participating insurance company to cancel or reverse the purchase or exchange on the following business day if the trade represents a significant amount of the portfolio s assets and Dreyfus has concluded that the account is likely to engage in frequent trading. Although these policies and procedures are designed to discourage market timing and excessive trading, none of these tools alone, nor all of them together, completely eliminates the potential for frequent trading. To the extent that the portfolio significantly invests in foreign securities traded on markets that close before the portfolio calculates its NAV, events that influence the value of these foreign securities may occur after the close of these foreign markets and before the portfolio calculates its NAV. As a result, certain policyowners may seek to trade portfolio shares in an effort to benefit from their understanding of the value of these foreign securities at the time the portfolio calculates its NAV (referred to as price arbitrage). This type of frequent trading may dilute the value of portfolio shares held by other policyowners.the portfolio has adopted procedures designed to adjust closing market prices of foreign equity securities under certain circumstances to reflect what it believes to be their fair value. To the extent that the portfolio significantly invests in thinly traded small-capitalization equity securities, certain policyowners may seek to trade portfolio shares in an effort to benefit from their understanding of the value of these securities (referred to as price arbitrage). Any such frequent trading strategies may interfere with efficient management of the portfolio to a greater degree than funds that invest in highly liquid securities, in part because the portfolio may have difficulty selling these portfolio securities at advantageous times or prices to satisfy large and/or frequent redemption requests. Any successful price arbitrage may also cause dilution in the value of portfolio shares held by other policyowners. Although the portfolio s frequent trading and fair valuation policies and procedures are designed to discourage market timing and excessive trading, none of these tools alone, nor all of them together, completely eliminates the potential for frequent trading. 12

15 DISTRIBUTIONS AND TAXES The portfolio earns dividends, interest and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The portfolio also realizes capital gains from its investments, and distributes these gains (less any losses) to shareholders as capital gain distributions. The portfolio normally pays dividends and distributes capital gains annually. Portfolio dividends and capital gain distributions will be reinvested in the portfolio unless the participating insurance company instructs otherwise. EXCHANGE PRIVILEGE Policyowners may exchange shares of a class for shares of other portfolios or funds offered by the VA contracts or VLI policies through the insurance company separate accounts subject to the terms and conditions set forth in the prospectuses of such VA contracts or VLI policies. Policyowners should refer to the applicable insurance company prospectus for more information on exchanging portfolio shares. Since the portfolio s shareholders are the participating insurance companies and their separate accounts, the tax treatment of dividends and distributions will depend on the tax status of the participating insurance company. Accordingly, no discussion is included as to the federal personal income tax consequences to policyowners. For this information, policyowners should consult the prospectus of the separate account of the participating insurance company or their tax advisers. Participating insurance companies should consult their tax advisers about federal, state and local tax consequences. Who the shareholders are The participating insurance companies and their separate accounts are the shareholders of the portfolio. From time to time, a shareholder may own a substantial number of portfolio shares. The sale of a large number of shares could hurt the portfolio s NAV. Account Information 13

16 For More Information Dreyfus Variable Investment Fund Developing Leaders Portfolio More information on the portfolio is available free upon request, including the following: Annual/Semiannual Report Describes the portfolio s performance, lists portfolio holdings and contains a letter from the portfolio manager(s) discussing recent market conditions, economic trends and portfolio strategies that significantly affected the portfolio s performance during the last fiscal year.the portfolio s most recent annual and semiannual reports are available at Statement of Additional Information (SAI) Provides more details about the portfolio and its policies. A current SAI is available at and is on file with the Securities and Exchange Commission (SEC).The SAI is incorporated by reference (is legally considered part of this prospectus). To obtain information: By telephone Call or By mail Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY Attn: Institutional Services Department On the Internet Text-only versions of certain fund documents can be viewed online or downloaded from: SEC Dreyfus You can also obtain copies, after paying a duplicating fee, by visiting the SEC s Public Reference Room in Washington, DC (for information, call ) or by request to publicinfo@sec.gov, or by writing to the SEC s Public Reference Section, Washington, DC Portfolio Holdings The portfolio will disclose its complete schedule of portfolio holdings, as reported on a month-end basis, at under Mutual Fund Center Dreyfus Mutual Funds Mutual Fund Total Holdings. The information will be posted with a one-month lag and will remain accessible until the portfolio files a report on Form N-Q or Form N-CSR for the period that includes the date as of which the information was current. In addition, fifteen days following the end of each calendar quarter, the portfolio will publicly disclose at its complete schedule of portfolio holdings as of the end of such quarter. A complete description of the portfolio s policies and procedures with respect to the disclosure of the portfolio s portfolio securities is available in the portfolio s SAI. SEC file number: MBSC Securities Corporation 0121P0508